Considering the domestic and overseas market situations, the good performance of prebaked anode demand has laid a solid foundation for the industry to maintain a high operating rate. Based on current market dynamics, SMM predicts that the market supply of prebaked anodes in July will increase slightly.

From the prebaked anode export data in May 2025, export volumes showed an upward trend compared to the previous month. Specifically, export orders to Indonesia, Canada, and the UAE increased significantly, all exceeding 10%, with a total increase of over 80,000 mt. However, orders to Malaysia, Iceland, and Russia declined. Southeast Asia and the Middle East regions have become the core engines of export growth due to industrial policy support and active investment, while demand in some traditional markets has contracted due to local capacity adjustments. Overall, prebaked anode export orders performed well in 2025, primarily due to the continuous release of new capacity in overseas aluminum markets and the gradual recovery of some enterprises' capacity, driving demand growth for prebaked anode. Additionally, after entering Q2 2025, the raw material side of prebaked anode showed signs of weakness, gradually weakening the driving force behind price increases. It is expected that subsequent export order prices will turn downward. Looking ahead, factors such as frequent fluctuations in raw material prices, complex and changing geopolitical risks, and a slowdown in global macroeconomic growth may adversely affect the price system and delivery rhythm of prebaked anode export orders. Continuous attention to relevant market dynamics is required.

[SMM Spot Aluminum Lunchtime Review: Discounted Transactions Persist Across Regions, with Slight Improvement in Trading Volume on the Weekend] On the inventory side, according to SMM's data on aluminum ingot inventories in three domestic regions, as of July 4, the domestic inventory of electrolytic aluminum ingots stood at 321,000 mt, showing a destocking of 7,000 mt compared to the previous trading day. In the short term, despite the low inventory levels of aluminum ingots, the increase in casting ingot production has supplemented market supply. Additionally, there is a strong fear of high prices in the spot market, coupled with weak downstream demand and significant production cuts, resulting in low purchase willingness. Transactions are occurring at discounts, and it is anticipated that spot discounts will continue to widen in the short term.

[Weekly Review of Aluminum Scrap and Secondary Aluminum: Off-season Aluminum Scrap Market Stalls at High Levels, Cost Pressure for Secondary Aluminum Alloy Remains Unsolved] Overall, with no substantial improvement in demand, prices encounter resistance in rising, but the logic of cost support remains. It is expected that secondary aluminum alloy prices will maintain a rangebound fluctuation in the short term.

[SMM Morning Comment on Cast Aluminum Alloy: Social Inventory Continues to Build Up, Orders Affected by High Temperature and Off-Season Consumption] Aluminum prices continued to rise slightly on Thursday, while the secondary aluminum market continued to struggle to catch up. The SMM ADC12 price range remained stable at 20,000-20,200 yuan/mt. Entering July, factors such as high temperatures during the off-season and high aluminum prices continued to impact downstream orders, prompting some downstream companies to initiate production cuts.

Details of the hot topics in the aluminum market this week (June 30 - July 3, 2025) are as follows......

[SMM Aluminum Morning Meeting Summary: Bearish Fundamentals Resurface, Aluminum Prices Fluctuate at Highs] Overall, macro side, China's favorable policies continue to intensify, promoting consumption in the same direction; overseas macro conditions are a mix of bullish and bearish factors, with risks still present. Fundamentally, in some regions, aluminum smelters have increased their casting ingot production. Coupled with the off-season in downstream sectors and fear of high prices, market transactions are far from ideal. Aluminum ingot inventory has seen a slight buildup, and spot premiums/discounts have weakened significantly. It is expected that aluminum prices will fluctuate at highs in the short term. Subsequent attention should be paid to the changes in casting ingot production and inventory.

[SMM Weekly Survey on Aluminum Downstream: Operating Rate of Aluminum Processing Industry Slips Slightly to 58.7% Amid Off-Season and Weak Demand amid High Temperature] Affected by factors such as the off-season amid high temperature, high aluminum prices, insufficient profit margins, and weak downstream demand, the operating rate of the aluminum processing industry this week decreased by 0.1 percentage point WoW to 58.7%.